Copper prices hit record highs amid AI and EV demand

Copper prices have reached record highs, with the London Metal Exchange (LME) reporting prices around $14,800 per tonne. This surge is driven by several converging factors, including the expansion of electrical grids, the rise of electric vehicles, and the rapid growth of artificial intelligence infrastructure.

AI data centers operated by companies such as Amazon, Alphabet, and Meta require massive amounts of copper for power distribution, transformers, and cooling systems. Some hyperscale facilities may require up to 50,000 tonnes of copper per installation. S&P Global predicts that global copper demand will increase by approximately 50 percent by 2040.

Additional market pressures include speculative hoarding in the United States due to potential import tariffs and supply disruptions in Chile caused by extreme weather events like El Niño. These factors have contributed to a nearly 40 percent drop in LME warehouse stocks since late May. Consumers may face higher costs for electric vehicles, heat pumps, and electricity installations as a result.